Tuesday, August 17, 2021

Energy Services of America (ESOA)
PPP Loan Forgiveness Positive

Energy Services of America Corporation is engaged in providing contracting services for energy-related companies. The company is primarily engaged in the construction, replacement, and repair of natural gas pipelines and storage facilities for utility companies and private natural gas companies. It services the gas, petroleum, power, chemical and automotive industries, and does incidental work such as water and sewer projects. Energy Service’s other services include liquid pipeline construction, pump station construction, production facility construction, water and sewer pipeline installations, various maintenance and repair services and other services related to pipeline construction.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Fiscal 3Q2021 (June) results fall short of expectations due to gas & oil transmission weakness. Compared to the June 2020 quarter and our expectations, the June 2021 quarter was weak despite the December 2020 acquisition of West Virginia Pipeline (WVP). Gross profit of $2.7 million was down slightly, but adjusted EBITDA of $0.7 million was almost half of last year’s EBITDA of $1.4 million. Revenue was down due to gas & oil transmission weakness and EBITDA was also burdened by higher G&A expense.


Adjusting 2021 EBITDA estimate to reflect FY3Q2021 operating results.  Given that operating results were below expectations and costs are likely to remain higher, we are lowering FY2021 EBITDA to $5.3 million from $8.0 million. The backlog increased to $73.1 million from $61.2 million and general construction contracts of $13.0 million have been awarded this quarter, which supports our positive …

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision.